TCS, Infosys, Wipro, Cognizant, HCL, Tech Mahindra, Other IT Firms To Lay Off 30 Lakh Employees:
The risk of losing a job in the Information Technology sector is increasing day by day. Moreover, this increase is due to automation in the IT sector. Also, according to a Bank of America report, domestic software companies, which currently employ 16 million people, are planning to lay off 3 million (30 Lakh) workers by 2022. This layoff of workers will help them save 100 billion dollars annually.
According to Nasscom, approx 9 million of them work in low-skilled services and BPO roles. Moreover, 30 percent, or 3 million, of these 9 million roles may lose the job by 2022. Also, the major reason is the impact of robot process automation (RPA). Furthermore, roughly 0.7 million roles are expected to be replaced by RPA.
IT Companies To Lay Off 30 Lakh Employees
“TCS, Infosys, Wipro, HCL, Tech Mahindra and Cognizant and others appear to be planning for a 3 million reduction in low-skilled roles by 2022 because of RPA up-skilling,” the Nasscom report says.
“This is a USD 100-billion in reduced salary and other costs. But, on the flip side, it offers likely a USD 10 billion boon for IT companies that successfully implement RPA. It also offers USD 5 billion opportunities from a vibrant new software niche by 2022. Given that robots can function for 24 hrs a day, this represents a significant saving of up to 10:1 versus the human labor,” says the report.
Skill Disruption will have the greatest impact on India and China. While ASEAN, the Persian Gulf, and Japan are at less risk. Perhaps, the most concerning trend is that jobs in emerging markets are at high risk to automation due to the mid-skilled nature of industries such as manufacturing, exposing the dangers of premature deindustrialization. Also, India’s manufacturing peak occurred in 2002, while Germany’s occurred in 1970 and Mexico’s occurred in 1990.
TCS, Infosys, Wipro, HCL, Tech Mahindra, Cognizant’s Likely to To Lay Off 30 Lakh Employees
- According to Nasscom, the domestic IT sector employs approx 16 million people. Moreover, out of this 6 million, approx 9 million working in low-skilled services and BPO roles.
- According to PTI, 30 percent or around 3 million of these 9 million low-skilled services and BPO roles will replace by 2022. The primary reason is the impact of RPA.
- Bank of America report released on Wednesday, roughly 0.7 million roles are expected to be replaced by RPA alone, and the remaining due to other technological upgrades and upskilling by domestic IT players.
- RPA will have the greatest impact in the US(United States), with a loss of nearly 1 million jobs.
- According to the report, based on average fully-loaded employee costs of USD 25,000 per year for India-based resources and USD 50,000 for US resources. This layoff will free up around USD 100 billion in annual salaries and associated expenses for corporates.
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What Is Robot Process Automation (RPA)?
RPA allows software developers to build software robots, or “bots,” that can learn, mimic, and then execute rules-based business processes. Users can create bots using RPA automation by observing human digital actions. Robotic Process Automation software bots can interact with any application or system in the same way that humans do, with the exception that RPA bots can operate around the clock, nonstop, much faster, and with complete reliability and precision. Robotic Process Automation bots possess the same digital abilities as humans, allowing employees to focus on more differentiated work.
Since due to the effectove technologies, robots can function for 24 hours a day. Also, this represents a significant saving of up to 10:1 versus the human labor,” says the report.
Why are IT Companies Cutting of Jobs?
Offshoring has helped the domestic IT sector grow from around 1% of GDP in 1998 to 7% today. This makes it a highly strategic sector for the country’s economy. It has also significantly outgrown its Western peers (primarily Accenture, Capgemini, and Atos) with annual revenue growth of 18% between 2005 and 2019.
Another major reason for RPA-driven job losses is that many countries that previously offshored their work are likely to bring the jobs back to their home markets. According to the report, developed countries will increasingly look to bring back offshored IT jobs and use either native IT workers or domestic software robots like RPA to secure their digital supply chain and ensure the future resiliency of their national technology infrastructure.
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Faster automation is being driven by a shrinking talent pool of high-skilled jobs in developing economies. Furthermore, the demand for which is only increasing, but the global high-skill talent pool is shrinking. This is exposing outdated immigration systems. Emerging economies, particularly India and China, face the greatest risk of technology-driven disruptions, which have the potential to affect up to 85% of jobs in countries such as Kenya and Bangladesh.
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